Financial advisers should consider increasing allocations to fixed interest in a post global financial crisis world, according to PIMCO’s head of global wealth management, Peter Dorrian.
Dorrian, who will deliver his message at the Association of Independently Owned Financial Planners conference, said risk is still prevalent in global markets, with evidence showing Australian investors have reaped higher returns from lower risk assets like bonds than from higher risk assets like shares.
His call for higher fixed interest allocations also comes as PIMCO’s outlook continues to predict ‘new normal’ themes, including slow economic growth across developed nations, lower equities returns and higher market volatility.
“Advisers should consider a larger role for actively managed bonds to improve income focused investors’ returns and to shockproof their clients’ portfolios,” Dorrian said.
